U.S. Solar Stocks Lifted By Woes Of China's Suntech

Several solar stocks jumped in the stock market today, as a subsidiary of a big China-based solar firm, Suntech Power Holdings (STP), seems headed toward bankruptcy court there. That's spurred speculation that China's support for its solar industry, a huge rival to the rest of the industry, could be waning.

U.S. solar companies First Solar (FSLR) and SunPower (SPWR), the two largest in IBD's No. 3-ranked Energy-Solar industry group, were up 5% and 4%, respectively, in afternoon trading. The next-largest, U.S. installer SolarCity (SCTY), was up nearly 2%. And U.S. chipmaker MEMC Electronic Materials (WFR) and China's Yingli Green Energy (YGE) were each up more than 5%.

The IBD group was up 2% for a second day. It's up 17% this year, though down 14% from a February peak.

Solar stocks sometimes get investor attention when oil prices lift, and a rising stock market doesn't hurt. But the news about Suntech appeared to most directly affect stocks in the group.

A group of lenders — eight Chinese banks — filed a petition for solar panel maker Suntech's main unit Wuxi Suntech to be declared insolvent, the company said in an announcement Wednesday. Reuters noted in an article Wednesday that the imminent failure of Wuxi Suntech would be among China's biggest company collapses in recent history.

Monday, Suntech had alerted investors that it defaulted on $541 million of its bonds due on Friday, and said that triggered cross-defaults on loans from International Finance Corp., which is a branch of the World Bank, and domestic Chinese lenders.

"We are currently exploring strategic alternatives with lenders and potential investors," Suntech CEO David King said in that announcement.

Suntech had debt of $2.2 billion at the end of March 2012, Reuters reported, including lending from China Development Bank, with a $50 million convertible loan from the IFC.

U.S. solar power installations jumped 76% last year in megawatts and to a market value of about $11.5 billion, the Solar Energy Industries Association and GTM Research said in a solar industry annual report released last Thursday.

SEIA President Rhone Resch, however, conceded that a global oversupply threatens the business of firms that can't lower their costs. The report forecast the growth of big utility-scale installations in the U.S. to slow, though other researchers have noted that demand from emerging markets will help take up the slack, while in the U.S. and Europe installing systems becomes a bigger business.

That's all taking place as end prices drop, making solar more cost-competitive vs. traditional fossil-fuel energy sources, though still amid significant government incentives.

SunPower (NASDAQ:SPWR) stock jumped Wednesday after the No. 2 solar panel maker's 2015 guidance and Q2 earnings beat some analyst expectations. Late Tuesday, SunPower said it expects non-GAAP revenue of $2.4 billion to $2.6 billion this year, which would be down 3.8% at the midpoint from 2014. ...

Solar energy manufacturer SunPower (NASDAQ:SPWR) continued its revenue slide late Tuesday when it reported its third straight sequential decline, with sales plummeting 39% from the year-earlier quarter, its biggest percentage decline since Q4 2011. The revenue drop comes five months after No. 2 ...

Stocks further perked up late Tuesday and were on track to end a five-session slide. All three of the major indexes have already recovered all of Monday's losses and then some. Helped by mining and energy stocks, the S&P 500 surged 1.3%. The Dow Jones industrial average rallied 1.1% and the ...

Two days after Hillary Clinton called for a 700% expansion in solar installations by 2020, No. 1 residential solar installer SolarCity (NASDAQ:SCTY) was set to announce early Tuesday expanded solar financing options for small and midsize businesses. SolarCity says its expanded options will give ...

07/28/2015 08:02 AM ET

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